Most people do not begin to think about retirement until they start to notice gray hairs and a few extra wrinkles. However, it is never too early to start planning for that new phase of your life. Some wise preparations while you are still young will make those retirement years more pleasant and carefree. However, if you have not begun retirement planning yet, and the time is approaching quickly, get started right away. Contact the Social Security Administration to inquire about Social Security benefits and Medicare, and determine whether you will need additional health care coverage. An experienced retirement planner can help you to develop a strategy that will make the most of the time remaining until you stop working.
Saving for Retirement
When you are young, a good savings plan is probably the most important thing you need to have in order to prepare for the time when you will no longer be earning wages. Start a habit of saving a percentage of your earnings from every paycheck even if you can only spare a few dollars at the time. You will be surprised at how your money adds up if you put it in a savings account that compounds interest. Shop for a savings account that pays the best interest rate and compounds it at least quarterly. When you accumulate enough in your account, invest part of the funds in a higher paying money market account or certificate of deposit, and your savings will grow faster.
IRA, 401k and Roth IRA
An individual retirement account (IRA) provides a good means of saving money, usually at a slightly higher interest rate than regular savings accounts, while providing income tax deductions as well. You can deduct the amount you invest in an IRA each year from the net earnings on your income tax form. The interest that you earn on an IRA is also tax-free until you withdraw it, and most people are in lower tax brackets when they withdraw the funds. However, if you must withdraw any money from an IRA before you reach age 59 ½, you will pay a penalty to the IRS. If you withdraw from an IRA account that has not yet reached maturity, the financial institution may charge a penalty as well. A 401k account and a Roth IRA are similar retirement fund options, and some employers will match their employees’ contributions to the funds, making them especially appealing.
Diversify
After you have been saving for a few years, you may want to look into other investment options like stocks, bonds, mutual funds and commodities. Unlike ordinary savings accounts, many of these investment alternatives are not guaranteed, so you have a greater risk of losing money with them, but on the other hand, your earning potential is usually higher. Prudent savers usually choose several different methods of investing their money, so if they incur a loss because of downturns in the market, they will still have other types of investments that are increasing in value. When you are young, you can be more aggressive with investments because you will have time to recoup any losses you may incur. However, as you get nearer retirement age, you will probably choose to be more conservative in your investments. A qualified retirement planner can help you to make wise decisions about the best ways to invest money to prepare for retirement.
Estimate Your Needs
When you want to be ready for retirement, try to determine the amount of money you need to save in preparation for the event. You already know approximately how much your expenses are every month in your current situation. Some of those expenses, like commuting to a job and other work related costs, may be reduced or eliminated after retirement. However, you may spend more on entertainment and traveling when you have more time to devote to those activities. If a move to another location is part of your plan, the cost of living there may be higher or lower than you are accustomed to in your current area. Carefully consider the type of lifestyle you want and where you plan to live after you retire, and calculate the approximate cost to maintain that standard of living.
Seek Assistance
When you plan to retire in Washington, whether you live there now or want to move there when you retire, it would be wise to choose a retirement planner in that state to assist with the many options available. Someone who lives and works in Washington is familiar with the cost of living in each area of the state, and an expert who deals with these issues every day knows how to advise people about the various opportunities that exist and which choices would bring the most benefit for each particular situation.
Some of the qualified well-known retirement planners in Washington are:
- Hubbard Consulting in Redmond,
- Edward Jones in Orting,
- State Farm Insurance in Seattle
- Levy Investment Group in Bellevue
- Horizons Financial in Seattle
- Eagle Estate Group Inc in Federal Way
- Parker Financial LLC in Silverdale
- American Retirement Planning in Bellevue
- Invesmart in Bellevue
- Financial & Retirement Planner in Tacoma
It is difficult to determine now what your financial needs will be when you retire because of many unknown factors, but a knowledgeable retirement planner can guide you in estimating how much you should save before you stop working.
Washington’s Popularity for Retirees
For many reasons, the state of Washington has become a popular place for people to retire. The climate is ideal, breathtaking views are everywhere, recreational activities abound and cultural opportunities are plentiful.
Climate
In western Washington, the summer temperatures usually do not rise higher than 79 degrees, and in the wintertime, the temperatures normally remain above 46 degrees. However, the summers are warm, and winters are cool east of the Cascade Mountains. Fog, drizzle and cloudy days are common in western Washington, and the Cascade’s western slopes usually receive heavy snowfall each year, but areas in the rain shadow east of the Cascades normally receive only 6 inches of precipitation a year.
The oceanic climate in western Washington varies greatly from the drier semi-arid climate in the eastern part of the state with the Cascade Mountain Range being the dividing point. The Pacific Ocean’s high pressure and low-pressure systems, North America’s continental air masses and the Cascade and Olympic Mountains provide the major determining factors in Washington’s climate. The high-pressure system in the spring and summer brings northwesterly winds, cool air and a normally dry season, while the low-pressure system in fall and winter creates southwesterly winds and comparatively warm and moist air masses for a normally wet season.
Of course, there are variations to the norm in Washington. Occasional big snowfalls with up to 6 feet of snow, some remaining on the ground for three months, and deep freezes with sub-zero temperatures have been known in the state.
Taxes
The state of Washington does not levy an income tax on residents. There is also no franchise tax or corporate income tax in Washington, but businesses must pay other state taxes like a gross receipts tax and a business and occupation tax.
Sales tax in Washington is 6.5%, but local sales taxes combine with the state base tax and normally make the total tax between 8% and 9%. Although soft drinks, prepared foods and dietary supplements require a sales tax, most foods are exempt from the tax. Sales taxes are charged on products and services alike, and gasoline, alcoholic beverages and cigarettes have an excise tax applied to them.
Nearly 30% of Washington’s state and local revenue is produced by property taxes, which help finance public schools, libraries, parks and fire protection along with other special purpose districts. Real and personal property is taxed unless exempted, and most personal property that individuals own is exempt from taxation. Personal property for conducting business or other non-exempt personal property is taxed. Intangible assets like stocks, bonds and bank accounts are not subject to taxation in Washington, and the state does not collect tax on retirement income from another state. Inheritance taxes are not collected in Washington, but the state does impose an estate tax.
Popular Retirement Locations in Washington
Bellingham
Rated as the number two city in “Cities Ranked and Rated” and called one of the top retirement communities in the U.S. by Kiplinger’s, Bellingham is located along the northwestern coast of Washington. Western Washington University and several colleges offer retirees opportunities to further their education and enjoy cultural pursuits. Sports enthusiasts will enjoy the Western Washington University games, matches and events throughout the year. The spectacular view of Mount Baker on the east and Puget Sound on the west is a feast for the eyes. A short drive to Mount Baker provides breathtaking scenery as well as the opportunity to ski and enjoy other outdoor activities like water sports, camping and fishing. The waterfront offers all types of water related pursuits as well as relaxing in the sunshine on the beach. The large Bellis Fair Mall should satisfy any shopping enthusiast and usually has many people from Canada taking advantage of the bargains they find there. The terminal for the inside passage ferry ride to Alaska is located in Bellingham, and many retirees enjoy spending a few days on that scenic journey.
Walla Walla
Whitman College, one of the country’s top small private colleges, is located in the southeastern Washington city of Walla Walla, and at one time, it was ranked by Money Magazine as the country’s number one place to retire. The Walla Walla onions grown there are world famous, and its wineries contribute to some people calling Walla Walla the Napa of the North. Restoration of the downtown with restaurants, bookstores and charming shops makes the city a pleasant place to shop or eat, and the quiet residential streets also contribute to make this city an ideal retirement community. Seventeen parks on 600 acres with walkways, pools and playgrounds offer wonderful sites to relax and play. Outdoor activities in the area include cross-country and downhill skiing, snowmobiling and snowboarding, and when the grandchildren come to visit, they will like BMX racing, skateboarding and disc golf at Fort Walla Walla Park.
Spokane
One of the largest cities in the northwest and the second largest city in the state, Spokane is located on the eastern border of Washington. Along with its neighbor, Coeur D’Alene, it is the economic, cultural and social center of the area. Many historic buildings downtown have been restored, and Victorian style housing additions as well as contemporary neighborhoods offer retirees a variety of living options. Running through the city is the Spokane River and Spokane Falls, which add some beautiful scenery to the area. Many people enjoy watching the Spokane Chiefs hockey team, ice skating in Riverfront Park, viewing the displays at the Northwest Museum of Arts & Culture or square dancing, round dancing and clogging at one of the 50 dances or associated events and workshops that are held there every month.
San Juan Islands
Living on an island is a unique experience, and there are 450 San Juan Islands from which to choose. However, you will probably want to select one of the 4 islands with ferry service to make things more convenient. The islands are located off the coasts of British Columbia and Washington and are a popular tourist destination as well as a popular site for retirement. These beautiful islands offer tranquility, gorgeous scenery and a beautiful setting for retirees to call home. The focus of the quiet life on the islands is usually on hiking, kayaking, whale watching, bird watching and other outdoor activities. After the tourists leave in the wintertime, the area becomes even more quiet and peaceful. People who enjoy a slower pace of living, solitude, beaches, forests and marvelous scenery will love the San Juan Islands.
The largest San Juan Island is Orcas with about 57 square miles and a population of slightly over 4,400. San Juan Island is near Orcas and has a population of 6,800. The only incorporated town on the San Juan Islands is Friday Harbor, a historic fishing village. In addition to fish, you will find museums, bookstores, gift shops, a movie theater, a bowling alley and restaurants there.
Seattle
You will never lack something to do in Seattle, the Pacific Northwest’s commercial hub. If you like to keep busy, there are many volunteer opportunities as well as part time jobs available in the city. It is easy to walk around the downtown area, and public transportation is plentiful. Many of the city’s homes and apartments have marvelous views of mountains, lakes, harbors and parks. When you want to enjoy a more spectacular sight, go the Space Needle Observation Deck 520 feet above sea level where you can get a 360-degree view of the surrounding area. The aquarium, gardens, parks, museums, various cultural programs and markets provide hours of entertainment, and skiing, boating and hiking are nearby as well. The live sporting events in Seattle are always exciting, and many retirees enjoy watching the Seattle Mariners, Seattle Seahawks and Seattle Thunderbirds in action. Boat and plane lovers will like the excitement of the Hydroplane races and Boeing Air Show held at Lake Washington. The University of Washington is located in Seattle drawing many young people to the area, and the city’s youthful flair tends to keep retirees young at heart.
Olympia
Olympia was recently named as one of America’s best college towns by Outside Magazine. The city has three community colleges, and they serve to keep the youthful presence alive in the area. Olympia is Washington’s capital and is the area’s entertainment, shopping and cultural center. The cultural activities are some of the main attractions that enhance the city’s popularity as a retirement location, and many retirees enjoy an evening at the casino as well. With the Olympic Mountains on one side and Puget Sound on the other side, Olympia is a great place for people who enjoy hiking, fishing and other outdoor activities. The mild, wet climate helps produce the scenic environment that people appreciate as they take pleasure in the plentiful open spaces in the area.
As you can see, there are many reasons to call Washington home after retirement. Spectacular scenery and a mild climate as well as endless opportunities for entertainment, culture, relaxation and recreation add up to make Washington an ideal place to spend your retirement years. Careful retirement planning now will help to make those years fulfilling and enjoyable.